Hogs
Price action: December lean hog futures lost $0.625 to $68.40, nearer the daily low.
Fundamental analysis: The lean hog futures market saw modest technical selling today. The near-term chart posture in hog futures remains bearish amid a still-weakening cash hog market.
The latest CME lean hog index is down $0.44 at $81.76. Tuesday’s projected CME index price is down another 55 cents at $81.21. The national direct five-day rolling average cash hog price quote for today is $79.72. The USDA’s noon pork report today showed cutout value was up $0.52 at $87.26, led by gains in picnics. Movement at midday was 139.40 loads.
Technical analysis: December lean hog futures still see the technical posture as bearish. The next upside price objective for the hog bulls is to close December futures prices above solid chart resistance at $74.375, which is the top of a downside price gap on the daily bar chart.. The next downside price objective for the bears is closing prices below solid technical support at $65.00. First resistance is seen at $70.00 and then at last week’s high of $71.625. First support is seen at the September low of $68.275 and then at $67.00.
What to do: Get current with feed coverage.
Hedgers: You currently have all risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: December live cattle fell $1.35 to $220.80, nearer the daily low. November feeder cattle lost $2.70 to $329.275, near the session low after hitting a two-month high early on.
Fundamental analysis: The live and feeder cattle futures markets saw some corrective selling pressure today after last week’s overall gains. Modestly weaker prices for cash cattle trading last week also pressured cattle futures.
USDA at midday today reported cash cattle trading last week averaged $220.67, down $1.20 from last week cash trade average of $221.87. The noon report today showed gains in boxed beef prices, with Choice grade up $2.71 at $381.54 and Select grade up $1.86 at $357.62. Movement at midday was light at 46 loads. The Choice-Select spread is presently plus $23.92.
Technical analysis: Bullish head-and-shoulders bottom reversal patterns appear to be forming on the daily charts for December live cattle and November feeders. The next upside price objective for the live cattle bulls is to close December futures above resistance at the August high of $229.425. The next downside technical objective for the bears is closing prices below solid technical support at $214.625. First resistance is seen at last week’s high of $223.20 and then at the September high of $225.50. First support is seen at last week’s low of $218.775 and then at $217.50.
The next upside price objective for the feeder bulls is to close November futures prices above technical resistance at $340.00. The next downside price objective for the bears is to close prices below solid technical support at the August low of $304.15. First resistance is seen at today’s high of $333.90 and then at $335.00. First support is seen at $327.00 and then at $325.00.
What to do: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through September in the cash market. Be prepared to make purchases if value prices continue.